The Energy and Associates Ghana

31/12/2025

PRESS RELEASE

Structure and Financial Implications of the Bank of Ghana’s Gold Operations:

Energy and Associates Ghana issues this statement to bring clarity to ongoing public discussion surrounding the Bank of Ghana’s gold activities and the reported financial losses associated with them. Our assessment is that much of the current debate fails to distinguish between two separate and deliberately structured gold supply chains operated by the central bank.

We note that the Bank of Ghana’s gold strategy is not a single, uniform operation. It is built around two distinct streams, each with its own policy purpose, risk profile and accounting treatment. Treating these streams as one inevitably produces a distorted picture of outcomes.

The first stream is designed to support foreign exchange liquidity. Under this arrangement, the Bank of Ghana purchases unrefined gold doré from artisanal and small-scale miners through the Ghana Gold Board. This gold is not added to the country’s official reserves. It is sold on international markets to generate foreign exchange for market interventions, including support for oil importers and commercial banks. This activity is transactional, operates on high volumes and thin margins, and is exposed to short-term price movements and operational costs.

The second stream is dedicated to long-term reserve accumulation. Here, the Bank of Ghana acquires refined and certified gold from large-scale mining companies. The gold is processed by refineries accredited by the London Bullion Market Association and added directly to Ghana’s official gold reserves, currently estimated at about 40 tonnes. This gold is held as a strategic monetary asset and not intended for rapid trading.

When the reserve portfolio is properly considered, the financial position appears materially stronger than is often suggested. Based on prevailing global prices, we estimate the market value of Ghana’s reserve gold at approximately US$6.1 billion. Using a conservative average acquisition cost of about US$1,600 per ounce, the corresponding book value is roughly US$2.06 billion. This reflects substantial unrealised gains embedded in the reserve position.

While unrealised gains do not finance public spending, they significantly strengthen reserve adequacy, enhance collateral capacity and improve the central bank’s ability to support the currency through swaps and other liquidity instruments.

Against this background, we believe it is important to question the methodology behind the Fund’s reported US$214 million loss attributed to the Bank of Ghana’s gold activities. It remains unclear whether this figure reflects a full, disaggregated assessment of both gold streams or whether it is limited to realised trading outcomes from the forex-focused operations alone.

In our view, any credible evaluation must be based on a full-chain accounting approach that clearly separates artisanal and large-scale gold flows, tracks costs independently and recognises both realised trading results and unrealised reserve gains.

We emphasise that Ghana’s gold policy rests on two pillars: a tactical instrument for managing foreign exchange pressures and a strategic programme for building long-term monetary strength. Balanced analysis and informed public discourse must reflect both pillars if conclusions about gains or losses are to be fair, accurate, and useful.

Energy and Associates Ghana
Research and Communications Desk
End

21/07/2025

For the past eight years, players in the energy sector have consistently advocated for a collaborative approach to sector reform. The challenges are well known ranging from inefficiencies in revenue collection, particularly at ECG, to issues around financial sustainability across the value chain.

Despite these constraints, the implementation of the Cash Waterfall Mechanism has brought a measure of stability. By ensuring a fair and transparent distribution of revenues, independent power producers (IPPs) are now receiving their due payments more predictably, allowing them to remain operational and financially viable. Attached is the may validation reports, which amplify all that we have been advocating for the past years.

This mechanism has been instrumental in building trust and keeping critical generation capacity online. It reflects the willingness of stakeholders not just to supply services, but to be genuine partners in strengthening the sector.

It is therefore essential that government remains committed to upholding the integrity of the Waterfall Mechanism. Doing so is critical not only for sustaining existing partnerships but also for attracting future investment and ensuring the long-term stability of Ghana’s power sector.

30/05/2025

Ghana's Energy Sector Debt: Cedi Appreciation Saves Nearly GH¢20 Billion

The Energy & Associates Ghana

Ghana's energy sector has long grappled with financial instability, marked by mounting debts and operational inefficiencies. However, recent developments indicate a positive shift, largely attributed to the improved performance of the Ghanaian cedi. This currency appreciation has played a crucial role in mitigating the sector's debt burden, effectively saving the country nearly GH¢20 billion.

The Debt Landscape

As of April 2025, Ghana's energy sector debt stood at approximately GH¢80 billion, with the Electricity Company of Ghana (ECG) accounting for over GH¢60 billion of this amount. This debt accumulation is primarily due to legacy arrears, inefficiencies in revenue collection, and high operational costs. The government owes Independent Power Producers (IPPs) about $1.73 billion, exacerbating the sector's financial challenges.

The Cedi's Role in Debt Reduction

The Ghanaian cedi has experienced a period of relative stability and appreciation, influenced by tight monetary policies, fiscal consolidation and robust foreign reserves. This currency strength has had a significant impact on the energy sector's debt profile.

Many of the sector's debts, particularly those owed to IPPs and fuel suppliers, are denominated in foreign currencies. A stronger cedi reduces the local currency equivalent of these debts, leading to substantial savings. Estimates suggest that the cedi's performance has helped Ghana avoid nearly GH¢20 billion in additional debt obligations.

Government Initiatives and Reforms

The government has implemented several measures to address the energy sector's financial challenges:

Debt Restructuring: Efforts are underway to renegotiate contracts with IPPs to reduce capacity charges and restructure existing debts.

Revenue Collection Improvements: The introduction of a single revenue collection account and the enforcement of the Cash Waterfall Mechanism aim to enhance transparency and ensure timely payments to service providers.

Private Sector Participation: The government is exploring partnerships with private entities to improve metering and billing systems, thereby reducing technical and commercial losses.

Outlook
While the cedi's strength has provided temporary relief, sustainable solutions are essential for the long-term stability of Ghana's energy sector. Continued reforms, efficient revenue collection, and prudent financial management will be critical in preventing future debt accumulation.

The government's commitment to these reforms, coupled with the cedi's performance, offers a promising path toward a more stable and financially viable energy sector.

Signed
[email protected]

12/02/2025

Congratulations Sir!!

09/01/2025

Thank you TV3!!

Energy & Associates has criticized the previous government's negligence in securing adequate energy supplies, warning of a potential power crisis.

28/10/2024

Signs were clear on the wall...

09/07/2024

We warned against this!!!

The recent arbitration between Eni-Vitol and the government has resulted in a major setback for Ghana’s international standing and economic interests. Initiated due to directives by the government that Eni-Vitol deemed unfair, the dispute has spotlighted significant missteps in handling petroleum sector agreements.

Background:
In 2021, Eni (Italy) and Vitol (Switzerland) sought international arbitration under UNCITRAL rules after Ghana directed them to merge their successful oil field with an adjacent, undeveloped block. This directive, perceived as politically motivated, required Eni-Vitol to transfer 55% of the merged entity to the adjacent block’s owner, which had only minimal investments.

Legal and Economic Concerns:
The Ghanaian courts supported the government's directives based on domestic law, but the global business and technical standards governing petroleum exploration and production were overlooked. These standards protect substantial investments and ensure fair treatment in international dealings. Eni-Vitol’s decision to seek arbitration was driven by the potential billions in losses and the lack of fair hearing prospects domestically.

International Tribunal Ruling:
The tribunal found Ghana’s directives to be unlawful and unjustifiable, marking a significant victory for Eni-Vitol. This decision highlights the importance of adhering to international legal standards and ensuring that government directives align with broader economic and commercial realities.

Implications for Ghana:
The controversy has already caused delays in developing other significant oil fields and may deter future investments. The government’s approach, driven by political and unpatriotic motivations, has undermined the country’s economic interests and international reputation. We criticized the government’s actions, emphasizing the adverse impacts on national interests but we always told we don't know more than the desperate actors of these actions.

Conclusion
The arbitration outcome serves as a cautionary tale for Ghana, emphasizing the need for prudent legal and economic strategies in managing its petroleum resources. Transparency and adherence to international standards are essential to safeguard national interests and attract sustainable investments in the sector.

19/03/2024

Dumsor Monitoring Series!!!

Power Generation and Demand - 19/03/2024

Previous and Current Peak Load:

The peak load increased from 3437 MW the previous day to 3618 MW today. This shows an increase in electricity demand.

Off-Peak Period:

Generation Capacity: 2915 MW

Forecast Max Load: 3173 MW

The generation capacity during off-peak hours is insufficient to meet the forecast max load, indicating a deficit of 258 MW.

Exports total 228 MW (CIE: 28MW, SONABEL: 150MW, CEB: 50MW).

Off-peak load management measures involve ECG reducing demand by 140 MW.

Peak Period:

Scheduled Capacity: 3316 MW

Forecast Peak Demand: 3714 MW

The forecast demand exceeds the scheduled generation capacity by 398 MW during peak hours, indicating a significant shortfall.

Exports remain the same as in the off-peak period, totaling 227 MW.

Peak load management involves ECG reducing demand by 200 MW.

Hydrology Data

Akosombo water level dropped slightly by 0.07 ft to 270.50 ft.

BUI water level also saw a small decrease of 0.05 m to 168.69 m.

These slight decreases in water levels indicate stable but monitored conditions for hydroelectric power generation.

Gas Flow Rate Data

Total gas flow rates for different sources are provided, with significant contributions from ENI (234.69 mmscf) and Gh-Gas (GPP) at 93.51 mmscf.

Tema has the highest gas consumption at 178.43 mmscf, followed by T'di at 77.48 mmscf.

The gas flow rates are crucial for understanding the available capacity for gas-fired power generation.

Liquid Stocks

LCO Stocks:
Takoradi has a significant amount of LCO stocks, sufficient for 13 days.

Tema's LCO stocks are much lower, only enough for approximately 2.6 days.

DFO Stocks:
DFO stocks are notably low, with TT32 having 6788.53 barrels and no stocks at KTPS, indicating potential supply issues for diesel-fired generation.

HFO Stocks:
AK79 has 295m³ of HFO stocks, which is relevant for heavy fuel oil-fired generation stations.

Summary

The power generation capacity is currently under strain both during off-peak and peak periods, with demand outstripping supply.

Hydrology data indicates stable conditions for hydroelectric power generation, though careful monitoring is necessary.

Gas flow rates suggest a reliance on gas-fired power generation, with significant consumption at major locations.

Liquid fuel stocks, especially for LCO and DFO, indicate a need for careful management, particularly given the low DFO stocks which could impact diesel-fired power generation.

Overall, there's a clear need for careful management of resources and possibly increasing generation capacity or reducing exports during peak demand times to ensure supply meets demand.

13/03/2024

Brace yourself for more Dumsor....it is going to get worse by year year.

01/09/2022

New Electricity tariffs begin today, just so you know this new tariff will create more debt as cost is reduced by some 30%. Interestingly this year alone we have accumulated about $1.4bil debt that we need to pay off. We estimate an annual debt accumulation of about $3.37bil by year end.

Also note that fuel price may increase between 5 to 10% this week.

Happy New Month!

19/08/2022

Who didnt know Aker couldnt fund Pecan, this Russian excuse is just being abused.

Norway's Aker Energy has put on hold its Pecan oilfield development off Ghana amid concern the project could face sanctions over the war in Ukraine due to the involvement of Russian oil firm Lukoil.